Regionalization of the South Caucasus

Through the 1990s to around 2008, the South Caucasus was widely imagined in the West as a periphery of Europe and the Western world, with which it would converge in terms of governance, economy, and norms in a unipolar world order. This was already a questionable assumption for a long time when in 2008 the Georgian-Russian war in and around South Ossetia asserted the region’s belonging to a contested neighbourhood between Russia and the collective West.

The Second Karabakh War of 2020 overturned both the ‘European periphery’ and ‘contested neighborhood’ paradigms, by asserting three new realities. First, the war demonstrated that there are alternatives to incorporation into a unipolar world order, particularly for regions bordered by major regional powers who reject that order. The 2020 war introduced a new reality, which I call ‘regionalization’: a process by which a conflict is ejected from a multilateral mediation process guided by principles of international law, and embedded instead within a conflict management process brokered by regional powers in accordance with their interests.

Regionalization assumes the preservation of vertical, external influences into local power structures, elites or counter-elites, and strategic assets. It can usefully be understood as a process quite distinct and even antithetical to regionalism, which assumes the development of horizontal ties within and among a region’s constituent actors.

Secondly, the Second Karabakh War highlighted the role of meso-level actors, such as Turkey and Israel, beyond a Russian-Western binary defining a ‘contested neighbourhood.’ By the same token, it made clear that ‘Eurasia’ is no longer sufficient as a geopolitical framework within which to understand the region, illustrating vividly how the South Caucasus and its dynamics straddle Europe, Eurasia, and the Middle East.

Thirdly, the war and several aspects of its aftermath in particular showed how local rivalries in the South Caucasus can link up with extra-regional rivalries, such as that between Iran and Israel, and arguably that between India and Pakistan. This introduces the real prospect that Armenia and Azerbaijan may become ‘proxies’ in wider rivalries.

The result over the 2020-23 period was a chaotic, almost anarchic setting that could be described as ‘contested regionalization,’ whereby an effort by Russia to dominate the regionalization process was contested by both external actors (the European Union and the United States) and, in different ways, by both Azerbaijan and Armenia. Russia’s dominion unraveled throughout 2022-23, culminating in September 2023 with its abandonment of a 26-year policy to avoid making a choice in the Armenian-Azerbaijani conflict by standing down in the face of Azerbaijan’s military operation to retake Karabakh.

Contemporary analyses of the current situation in the South Caucasus struggle to encompass the region’s frankly kaleidoscopic geopolitics with its myriad actors, fractures, and rivalries. What counter-forces can stall, stop, or even reverse the advance of regional fracture in the South Caucasus? Historically, the answer to this question is the emergence of a new hegemon or the reassertion of an old one. In 1917-21, an earlier interval of extreme fracture, it was Russia in a new incarnation as the Soviet Union that reasserted control over what was then referred to as Transcaucasia. In the late 1990s, it was the liberal international order that sought to transform the region through supporting transitions to democracy, market economies, and participatory peace processes.

In the current global moment characterised by advancing multipolarity, however, the emergence of a single new hegemon in the South Caucasus appears unlikely. The geographies of the region have already been in flux for several years and the region’s increasing straddling of multiple regions – Europe, Eurasia, and the Middle East – and their associated regional powers makes it unlikely that any one vector can dominate on its own. Russia, the outside power with the strongest ideological commitment to a ‘sphere of privileged interest’ in the South Caucasus, is currently limited in its capacity to reassert control, although certainly not in its capacities to adapt to new circumstances.

At the same time, the opposite outcome to hegemony – the emergence of a bottom-up, networked regionalism among the South Caucasus states and societies appears just as unlikely. The primary vehicle for this kind of transformation would be the successful conclusion of peace agreements, and specifically an Armenian-Azerbaijani agreement, for although it is not the only conflict in the region no other has the same cancelling effect on regional connectivity.

The New (Old) Horizons of the Armenian-Azerbaijani Peace Process

The current conjuncture of the decades-old Armenian-Azerbaijani peace process is paradoxical. The core issue driving the conflict – the status of mountainous Karabakh and the rights and security of its Armenian population in Azerbaijan – has been removed from the negotiating table, and with it the intra-state layer of the conflict. The conflict framework has consequently been reduced to its inter-state and international dimensions, which might be seen as simplifying the negotiations process. There is, at least within the framework of formal talks, quite simply less to discuss.

This means, however, that the peace process faces a ‘truncation-diffusion’ paradox: the agenda for formal talks between Armenia and Azerbaijan has been dramatically truncated, while the issues that are contested between the two societies have multiplied and become more diffuse. At the same time this truncated agenda still also faces a diffuse and fluid mediation landscape, with plural ongoing tracks associated with different mediators.

This situation presents the long-awaited conclusion of an agreement between Armenia and Azerbaijan with several risks, some of them resonant with challenges faced in earlier eras of the process. A first risk is the signing of a document so narrow in scope that it will not define an agreement with sufficient clarity or a mechanism to resolve the inevitably competing interpretations of what its articles mean.

This is not a new problem. For over a decade in 2007-20, Armenian and Azerbaijani negotiators discussed the ‘Basic Principles,’ a series of bullet points covering not more than two sides of an A4. This was seen by Minsk Group mediators as a more viable alternative than drafting longer documents. Yet everything about the Basic Principles, from their meaning to their wording to their sequencing, was interpreted in radically different ways across the Armenian-Azerbaijani divide. A similar problem was associated with the 10 November 2020 Ceasefire Statement brokered by Russia. Its sparse text, comprising just nine articles, prescribed what amounted to a vast transformation of the South Caucasus. Like the Basic Principles, the meaning of several of its articles was bitterly contested throughout 2021-23 with persistent accusations that one or another side was not abiding by the ceasefire.

A second, likewise perennial risk is a geopoliticised agreement that, by appearing to favour the influence and interests of one geopolitical vector, will incur spoiling by others. The extent to which regimes of peace have never been indigenous in the Armenian-Azerbaijani context but rather imported by external powers and suffused with their agendas remains under-appreciated. In an era of multipolar, competitive influence-seeking, this problem is all the more evident.

There does appear to be a simple solution to this problem, which is the promotion of direct bilateral negotiations owned just by Armenia and Azerbaijan. This would indeed appear to be the only way to avoid geopoliticised mediation. The 7 December 2023 declaration announcing agreement on a package of confidence-building measures (including the release of 34 detainees from both sides), which proceeded from direct talks between Baku and Yerevan, has been seen as a rare positive result affirming the viability of a bilateral format.

Yet in a situation of stark power disparity, the ambiguities of a minimalist agreement and absence of a dispute resolution mechanism, fears that the stronger side would revert to the use of force to secure maximalist agreements are not unfounded. The last three years have seen extensive use of coercive diplomacy, perceived in Azerbaijan as having been both justified and effective. This fuels Armenian concerns that the use of force would resume when disputes over agreement implementation arise and drives a quest for external guarantees, reintroducing geopolitics in a vicious circle.

These risks combine with numerous asymmetries that characterize the Armenian-Azerbaijani rivalry today: in the geopolitical, strategic, and economic resources available to each country; in each state’s relationship with its civil society; and in the approaches, levers, and strategic visions for stabilization among external powers. This is a hostile environment for the emergence of some kind of ‘value equilibrium,’ meaning a commitment to a shared set of values underpinning peace, such as comprehensiveness, sustainability, and the reinforcement of non-violent norms. Without these, it is difficult to envision a sufficiently robust agreement able to weather the challenges that it will inevitably face.

New contours of regional fracture

Rather than a ‘top-down’ scenario of return to single-hegemon domination or an elusive ‘bottom-up’ scenario of networked regionalism enabled by comprehensive peace agreements, it is more likely that the South Caucasus will continue to be characterised by fluid and non-mutually exclusive geopolitical axes structured firstly by geographic vectors (north-south, east-west) of connectivity; secondly by an array of cultural affinities, transnational linkages, and common strategic interests between states; and thirdly by normative preferences.

Mapping these constellations is beyond the scope of this article, but it is clear, for example, that there are coalitions of interest in north-south connectivity including Russia, Azerbaijan, Iran, and India, and in east-west connectivity including the European Union, Turkey, Armenia, Azerbaijan, Central Asian states, and China. There are embedded strategic partnerships such as those between Turkey and Azerbaijan, Azerbaijan and Israel, Russia and Iran, Georgia and the EU, while there are also more contingent partnerships such as those between Armenia and Iran, and Azerbaijan and Russia. Finally, there are normative preferences that, although imperfectly, align Armenia and Georgia with the EU, and Azerbaijan with Turkey and Russia.

Even on the basis of this cursory overview, a few observations about the dynamics in the coming period are in order. Firstly and most obviously, strategic competition in the South Caucasus is set only to increase, with key vectors of possible development associated with rival geopolitical coalitions. This has implications for the region’s states, that stand to benefit from straddling rival vectors rather than risking association with only one of them. Assumptions around the bloc politics derived from the unipolar order of the 1990s-2000s are obsolete. Multipolarity will be reflected in multi-vector foreign policies, shallow commitments to the structures and mechanisms of hegemonic regionalism, and strategies to extract geopolitical rents made possible by interstitial positioning.

Second, coalitions of common interest in specific connectivity projects are quite distinct from wider region-building projects. Connectivity has been the talk of the town for the last three years, and the only theatre where peace narratives have been widely discussed. Yet the various corridor initiatives – the Zangezur Corridor, the Middle Corridor – have been associated with rhetorics of exclusion or domination vis-à-vis some regional actors over others. This casts doubt on their long-term viability, particularly where substantial external investment is needed to make them happen. These projects in their current form pose the conundrum of whether connectivity is possible without regionalism. Put differently, without regional values credibly committing to the non-violent resolution of extant disagreements, is South Caucasian connectivity with its associated financial risk possible?

Third, and finally, the most significant regional state in terms of its geography, current capacities, and participation in regional cooperation projects is Azerbaijan. Azerbaijan’s foreign policy, however, is founded on the rejection of bloc politics in favour of a non-aligned position supplemented by a deep and multi-sectoral alliance with Turkey, a variety of other commitments to partnerships, alliances, or memberships with the Non-Aligned Movement, Russia, the EU, Organization of Turkic States, Council of Europe, and Organization of the Islamic Conference and the Shanghai Cooperation Organization. More than any other South Caucasian state, Azerbaijan’s pre-existing foreign policy paradigm has combined with emergent multipolar global and regional currents to its benefit. By the same token, this makes an Azerbaijani commitment to a specifically South Caucasian region-building project – for which a robust and sustainable peace with Armenia is indispensable – unlikely. One could argue that regionalism, assuming regional governance founded in the institutionalization of multi-sectoral horizontal ties, would be irrational from the perspective of those at the summit of Azerbaijan’s power vertical. More likely is Azerbaijan’s continued leveraging of its interstitial positioning in a wider network of extra-regional relationships reflecting the country’s aspirations to ‘middle power’ status.

These considerations point to the unlikelihood of geopolitical equilibrium or region-building driven by local or normative factors in the coming period. Instead, growing strategic competition by outside powers and regional state strategies of foreign policy pivoting, ‘double-dipping,’ and other manifestations of multi-vectoralism will drive continuing fracture and fragility – none of which are incompatible with the resumption of large-scale Armenian-Azerbaijani violence.